Cornwall has a Budget and a Plan

As Chair of the newly-formed Strategic Budget Advisory Committee (SBAC), I write to share the Committee’s goals and aspirations.

Established by the Cornwall Town Board this past January, the Committee was created to provide the Town Board with independent, community-based advice and guidance regarding:

• The formulation of the Town’s annual operating budget
• Communicating to the general public the budget’s overall goals and priorities, and the specifics of its revenue sources and objects of expense
• The Town’s overall financial condition as revealed in its audited financial statements
• Long-term operating budgetary planning, including capital improvement planning and prioritization.

Committee Membership

The Committee’s membership was finalized by the Town Board this past April, and consists of the following five community members, who reside in either the Town or Village, and have expertise in business, finance, and/or administration: myself, Steve Powell, Eileen Hartmann, James Keyes, and Scott Drews. The remaining four Committee members are the following Town officials and employees: Supervisor Josh Wojehowski, Town Board member Mary Heed, Town Controller Pam Wood, and Highway Superintendent Tom Gschwind.

Committee Meetings

The Committee has thus far met twice to consider the overall structure of the Town budget, its various funds for specific purposes, and the primary sources of its revenues and objects of its expenditures. 

Committee Issues

Future meetings will address a number of related issues, some of which will be:

• The process by which the annual operating budget, and plan for capital expenditures, are formulated;

• The primary drivers of cost inflation in the budget, and how they may be mitigated;

• The identification of the fixed and variable expenses in the budget, i.e. the distinction between expenses that the Town Board has no power to avoid, either in total or year-over-year increase, and those expenses that the Board can, in theory, eliminate either in total or year-over-year increase;

• The tension between preserving quality service delivery and the desire to contain costs.  Budgetary expenses for core services and activities rarely diminish over time.  At best they remain stable or experience modest increases in the short term.  Some categories of major expense, however, often experience significant year-over-year increases.  This is often referred to as “the cost-inflation problem”;

• The process by which total tax levy revenue is generated and determined among the 13 funds that generate this revenue;

• How the Town can best grow its total revenues, especially those that come from other than tax-levy sources;

• Recognizing that the cumulative effect of the Town’s budget – the collection of its revenues and the execution of its expenses – has a direct impact upon the Town’s overall financial condition, a review of three of the Town’s most recent audited financial statements will be conducted in order to assess that condition;

• Municipal finance ratio analysis will be employed as part of the assessment of the Town’s overall financial health.  The analysis will include metrics that address such broad financial issues as liquidity, operating performance and efficiency, tax-levy revenue dependency, debt and debt service levels and structure, and fund balance reserve availability;

• The financial statement analysis will also include a review of the capital projects that the Town has recently initiated, the resulting increases in debt levels and debt service obligations, and their implications for future capital project and equipment acquisition initiatives;

• The Committee will explore the creation of a process designed to create multi-year future budget projections of revenues and expenses to assist Town leaders in budgetary planning and future policy determination;

• Finally, the Committee will function as an arm of the Town Board in support of the Board’s obligation to respond to legitimate, community-based inquiries into budgetary matters.  At the Board’s direction, the Committee will respond to questions and/or issues, from either individuals or groups, that relate to the Town’s current budget and/or other fiscal matters of public concern.

I trust that this brief description of the Committee’s mission, and the financial matters that it intends to address, has been usefully instructive. The Committee will continue to use this medium of communication to the community going forward as it deliberates over the issues herein described.

-Sebastian Persico